Stratus LEDs Senior Project

Through the B.U.S. individualized major program I have gained valuable skills in a variety of fields that are very applicable to starting and operating a business. To demonstrate and unite these skills I have chosen to base my senior project on the launch of a new company I created: Stratus LEDs. This project combines elements of film, marketing, engineering, design, and business. I have created this webpage to consolidate all the work that has gone into this project and to showcase the skills I have learned during my time spent at the University of Utah.

Background

I've always had a passion for creating things. in 2009 I started a YouTube channel to show off my creations (which mostly consisted of R/C vehicles, aircraft, rockets and drones) to viewers online. Over the past 8 years, this YouTube channel has grown to over 100,000 subscribers and is now an extremely valuable asset to the several business ventures I have embarked on. Its allowed me to share ideas with the world, identify interest in new product ideas, and get feedback on designs. In addition, its a very effective platform for marketing new products and to raise funding for product development. In 2015 I saw the need of an accessory for stabilized camera gimbals that would allow them to be mounted on vehicles. There was nothing else like this on the market at the time. I designed a product to fill this void, and launched a successful Kickstarter campaign. For about a year I had no competition in this niche industry and sold hundreds of these vibration isolator devices. This project taught me valuable supply chain management skills and provided the capital to start Stratus LEDs.

LED Lighting

In 2015 I posted a video of a 1kW LED flashlight I built with cheap electrical components off eBay. I never expected it to go viral, but it got over three million views within four days. This proved that there is a lot of interest in high powered lighting systems and it inspired me to create a manufactured version to sell. Using profits from vibration isolator sales, I began to prototype and test different designs and electronics. This process was slow because of the complexity of the LED driver circuitry and multiple failed attempts at creating an efficient heat sink/housing. Around the same time I took a class through the Multiple Disciplinary Design program about the Solidworks CAD program. This opened up a whole new world for me in terms of design and engineering. It became much easier for me to create designs and send them to manufacturing companies for prototyping. After this point, the product development process became much faster and more efficient.

Another big challenge was finding an ODM electronics company to design, prototype and manufacture a power supply circuit board. I took several entrepreneurship courses that gave me the skills and information I needed to find suppliers and communicate the requirements and technical specifications. These courses also helped me understand how start up companies typically raise funding and deal with investors. Even though I started Stratus LEDs without any outside investment, it's still good to know how other companies operate.

The film aspect of my degree has largely been the spark behind my entrepreneurial ventures because the projects are so reliant on film or video in one way or another. The technical skills I learned in production and cinematography classes have been imperative to my YouTube channel and the visual media marketing methods I've used. Additionally, my grip and lighting classes have given me invaluable information about the industries I'm now selling products to. Photography classes have taught me the skills needed to take my own product photos and avoid having to hire the work out.

The business aspect of my past ventures has been my weak point. Selling vibration isolators was a good introduction to business for me but it didn't require savvy business skills. This was mainly because there was high demand, high profit margin, and the product essentially sold itself. Stratus LEDs has required sharper business skills because of lower profit margins, a larger initial investment, a larger number of orders, and a more complex product.

Stratus Leds business plan

Summary

Stratus LEDs is a start up company selling multipurpose high power LED systems. Stratus LEDs focuses on product design and development as well as marketing and distribution. Manufacturing is sub-contracted to several partner companies over seas. Marketing efforts are based on viral video production and online adds.

Products

Stratus LEDs core product is the 100W LED Module. It is a small and lightweight multipurpose light emitter that can be used alone, or grouped together with other 100W LED Modules to form ultra bright light bars. They can be powered by batteries for portability or A/C power supplies. The key selling point for the LED Modules is that they are the smallest and most powerful light emitters for the price. They have a very low price point to encourage users to buy larger quantities and use them as a low cost alternative to expensive film lighting systems. Potential use cases include: film lighting, utility lighting, search and rescue, event lighting, long-distance terrain lighting, off-road vehicle lighting, and more.

Accessory kits enable users to configure multiple LED Modules for various applications. Light bar kits allow users to combine multiple LED Modules to form ultra high power light bars and grids. Aerial Array kits allow users to combine multiple LED modules for use on drones. Accessory kits have a higher profit margin than individual LED modules.

In addition to the previously mentioned stock products, Stratus LEDs also offers design and build services for custom LED systems. This is most commonly for ultra powerful and light weight systems for use on drones.

One of our custom drone lights in use

Market

Stratus LEDs has three main customer segments: The first consists of low to medium budget film makers. Stratus LED products will allow them to achieve same lighting effects that high budget film makers create with extremely expensive lighting systems. Stratus LED products also open new creative possibilities that are made possible by the light weight and compact size of our lighting modules. The second segment is high budget film makers in need of unique lighting solutions such as lightweight systems for use on drones or in remote areas. Stratus LED components can be utilized in many diffrent configurations to a wide range of applications. The third segment is hobbiests who are interested in creating DIY lighting systems, vehicle mounted light bars, and flashlights. Although this market might seem small to most, our viral YouTube videos have proven otherwise. The most important customers will be filmmakers purchasing larger quantities of our LED modules and customized lighting systems because these segments will be most profitable.

Distribution

Large volume products like individual 100W LED Modules are distributed by Amazon.com. Lower volume products like LED Light Bar kits are distributed directly by Stratus LEDs in order to retain higher profit margin. Purchases are made through the Stratus LEDs web store and shipping is done through Stamps.com.

Financial

Individual LED Modules will have a low price point in order to appeal to both the film lighting market and the hobbiest market. This way, they are not too expensive for hobbiests and film makers will be enticed to buy larger quantities. Lower volume products will have a higher price point for a higher profit margin. This is possible because the filmmarket is willing to pay high prices. The low price of the LED Modules is one of the key selling points. They will be relatively inexpensive compared to the cost of manufacturing, but this is part of the strategy to sell expensive accessory kits with a high profit margin.

Production

After months of prototyping and product development, we started the first production batch consisting of 1000 LED Modules. Assembly was completed on March 27th 2017 and we received the shipment on April 19th.

Marketing

We began shooting marketing content in 2016 with the initial scratch built prototype lights. Since then we've collected hours of footage showing many different use cases and environments in which our lights can be used. This is where the film aspect of my degree really shines through. Some examples can be seen here:

In addition to our promotional content, we'll have a series of tutorials showing how to use our products and different applications in which they can be used. There will be one main instructional video that shows how the individual LED modules can be used and outlines their different functions. There will also be several other videos showing special use cases for the LED Modules and how they can interface with different control system and hardware mounting systems. Here are the videos we have finished thus far:

Several publications have shown interest in sharing our story so we created the following press release article:

STRATUS LEDS: TURNING NIGHT INTO DAY WITH LED LIGHTING TECHNOLOGY

In late 2015 Daniel Riley posted a YouTube video ( https://www.youtube.com/watch?v=-JVqRy0sWWY ) of his scratch built 1000 watt LED flashlight. Within four days of being posted the video accumulated over 3 million views. “This proves there’s a big market out there for ultra bright LED lighting systems,” says Riley, a senior in the Bachelor of University Studies program at the U. He decided to go after this market by starting Stratus LEDs (https://www.stratusleds.com), a company that designs, manufactures, and sells multipurpose high power lighting systems.

Stratus LEDs core product is their 100 watt LED Module. These can be used individually as small and portable lights, or grouped together to form a blindingly bright light bars. “The applications for these lights are endless,” says Riley. “We’ve currently narrowed down our marketing efforts to target the film industry, the off-road vehicle industry, and hobbiests.” The LED Modules can be thought of as the core building block for DIY high power lighting systems.

During the past winter Riley put the prototype light systems to the ultimate test by using them to film backcountry snowboarding at night in blizzard conditions. “As far as I know, this is the only lighting system of comparable brightness that is small and light enough to be carried by hand into remote locations. It’s a real game changer for action sports filmmaking at night.” Some example videos can be seen here:

“We’re guessing our lights will be most popular amongst low and mid budget film makers. The individual 100 watt LED modules (https://www.stratusleds.com/100wledmodule/) will cost $49 each and be equally as bright as film lights in the $400-$500 range. Our ten module light bar (https://www.stratusleds.com/array-kit/) will produce as much light as a traditional 7000 watt film lights and cost a fraction of the price.” With a light this bright you can light up the side of a mountain from 1000 feet away.

In addition to ground based lighting systems, Stratus LEDs has also pioneered drone lighting. In 2016 Riley posted a YouTube video (https://www.youtube.com/edit?o=U&video_id=Gl1xYyGom1g) he made of his Freefly Alta drone carrying the same 1000 watt light that was seen in his first viral video. “This sparked a lot of interest in the film industry. I was getting contacted almost every day by directors and producers wanting to hire my drone lighting services for music videos and feature films. One of the most notable projects we worked on was a music video for Elliot Moss’s new song – Closedloop. It was shot in various locations around Utah during December of 2016.” The full video can be seen here: https://www.youtube.com/watch?v=ENIKuCfKgoA

“I’m looking forward to seeing how the next few months will go. There has been a ton of interest in our products and I’m confident we’ll be able to sell a lot of systems,” says Riley.

Accessories

We will offer several accessories to widen the potential use cases for the LED Modules. These include parabolic reflectors for a more narrow spot beam, and nylon battery bags to make use on a light stand more convenient. We will also sell batteries, chargers and AC-DC power supplies. In the near future we also plan on offering vehicle mounting kits and lighting diffusion kits.

Moving Forward

Once our first inventory shipment arrives we will start fulfilling preorders immediately. In order to deal with the large distribution volume, we will do a soft start with marketing. We will wait to start publishing marketing videos until we have fulfilled preorders and contacted everyone on our email notification list (which consists of over 2000 people who have signed up).